On March 6th, 2003, African American employees of Friedman's jewelry store filed a lawsuit under 42 U.S.C. § 1981 against Friedman's Inc., along with Federal Insurance Company and St. Paul Mercury Insurance Company. The lawsuit was brought in the U.S. District Court for the District of Maryland, ...
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On March 6th, 2003, African American employees of Friedman's jewelry store filed a lawsuit under 42 U.S.C. § 1981 against Friedman's Inc., along with Federal Insurance Company and St. Paul Mercury Insurance Company. The lawsuit was brought in the U.S. District Court for the District of Maryland, Southern Division. The plaintiffs, represented by private counsel, sought equitable and injunctive relief, alleging that they had suffered a racially hostile work environment, discriminatory policies and practices, and a pattern or practice of race discrimination in hiring, promotion, compensation, and other terms, conditions, and privileges of employment.

This case was brought after plaintiffs allegedly suffered various forms of racial discrimination. One plaintiff, a former African American employee of Friedman's, claimed to have been repeatedly turned down for promotional opportunities due to the way her hiring would affect the "racial mix" in the store. Another plaintiff was allegedly discharged from his position after opposing Friedman's racially discriminatory policies and practices. Plaintiffs also claimed that management at Friedman's had been repeatedly instructed not to hire "too many African Americans at any one store." Additional claims included African Americans being routinely paid less in similar positions that were also held by white employees and that these and other factors contributed to a racially hostile work environment and a pattern and practice of racial discrimination.

In 2004, the parties reached an agreement which included monetary and injunctive relief. However, on January 14, 2004, after reaching this settlement, Friedman's Inc. filed for a Chapter 11 bankruptcy. Due to the bankruptcy proceedings, the settlement could not be completed. The parties agreed to a revised class settlement which included a reduced amount of monetary relief and injunctive relief, however Friedman's went into bankruptcy once again and the settlement could not be completed. After the second bankruptcy, Friedman's chose dissolution.

The parties entered a final settlement in 2009. A final consent decree was approved by Judge Alexander Williams Jr. on February 12, 2009, and the named plaintiffs and class members received over a million dollars, including attorneys' fees and costs.